As the Market Struggles, I'm Buying This Stock With a Potential TikTok 'Kicker'

The market is under heavy pressure Monday morning as concerns about inflation and interest rates are gaining traction. In addition, market players do not know what to expect when Donald Trump takes office next week.

The bears have gained traction, but many stocks have already become oversold, and there is good potential for some bounce action on upcoming economic news and the start of earnings.

It is a sea of red on Monday morning, with breadth running around three to one negative and the number of new 12-month highs quickly piling up to around 350 names.

What is hurting this market right now is uncertainty, which is causing selling across the board regardless of valuations or fundamentals.

When the buyers do come back, the first names they tend to buy are the Magnificent Seven MAGS. They have consistently been the best group for a bounce, plus they all have solid fundamentals.

The biggest concern about the Mag 7 is valuation, but some are much cheaper than others. I compare the P/E ratio to the growth rate to determine which names are the cheapest. This is called the PEG ratio. Based on that metric, the cheapest Magnificent Seven names are Nvidia NVDA and Meta Platforms META, while Apple AAPL, Microsoft MSFT and Tesla TSLA are the most expensive.

While I already have exposure to Nvidia, I am buying some Meta as it pulls toward its 50-day simple moving average. The chart is still in good shape, and the company has beaten EPS estimates by an average greater than 9% over the last four quarters.

Meta also has the potential kicker of a boost should TikTok be banned in the U.S. The stock spiked the other day on news that China would more likely liquidate TikTok than sell it if the U.S. Supreme Court rules against them.

I am looking for Meta to bounce back as it heads into earnings on January 29.

At the time of publication, Rev Shark was long NVDA and META.